Malaysia central bank slashes 2021 growth outlook

Malaysia's economy expanded more quickly than expected on an annual basis in the second quarter, but the central bank slashed its 2021 growth forecast as rising Covid-19 cases and new lockdown measures weighed on the outlook.

Gross domestic product rose 16.1 per cent from a Covid-induced slump a year ago, helped by an improvement in domestic demand and robust exports, and beating expectations for 14.3 per cent growth in a Reuters poll of economists.

The economy bounced back from its worst contraction in over two decades in the second-quarter of 2020.

But gross domestic product shrank on a quarterly basis while the central bank cut its full-year growth forecast to 3.0 per cent-4.0 per cent from 6-7.5 per cent previously.

Malaysia has seen a resurgence of Covid-19 infections due to the Delta variant of the coronavirus, reporting record-high cases and deaths in recent days, and has grappled with some form of lockdown since May.